Last evening the President delivered the annual State of the Union address. Whether you agree with his politics or not, the idea of reviewing the current and future prospects of any organization, large or small, is always a good idea.

Most business owners, lawyers included, are usually so busy simply running their business, that they have little or no time available to actually reflect on where their business has been or where they think it will be a year from now. From my own personal experience as a law firm productivity consultant here are some real-life examples of how my own clients have benefited from such an annual review.

How much and for how long has money been owed to the firm? And by which clients? Controlling accounts receivable – the money owed to the firm – is the key to running a successful law business. Recently a client asked me to resolve a bill printing issue and in the course of finding the solution we printed out a list of all of the outstanding invoices owed to the firm. The report indicated that the firm was owed the equivalent of 4 months’ average monthly income, which was the equivalent of an interest-free loan by the firm to the clients who owed the money. I asked the senior partner if he was happy about this discovery and he told me that he never had bothered to review this particular report. The firm was used to receiving X amount per month and as long as that remained constant he never thought that there was a problem. The amount was owed by literally hundreds of clients, not merely a few laggards. Apparently the law firm’s clients had learned that the firm didn’t hound them for the money that they owed, so they did not submit it in a timely manner. If your firm does not send Past Due notices from the firm’s time and billing program, the firm is not operating efficiently.

How often are closed matters archived? Many of the firms I visit complain that their practice management software is running very slowly. While hardware or network issues can sometimes be the cause, most often it is the enormous number of “active” matters which are clogging up the system’s database. At one firm I found 36,000 “active” matters, which, when reviewed over several months, were reduced to the actual number of less than 3,400 by archiving the other 32,600 matters. Thereafter the staff was able to work more efficiently (earning the firm more money) instead of repeatedly waiting for their computer monitors to refresh with a requested list. Archiving does not delete a matter, it merely prevents it from being displayed automatically. It can always be manually retrieved.

Is the firm using the most current versions of the software used to run the practice? Most law firms adopt the position that once they buy practice management or time, billing and accounting software they need not upgrade it, as long as they are using it to perform the same work year after year. If their computers were not connected to the Internet, this would be a correct position. However, all office computer networks are connected to the Internet and are bombarded daily by update notices or actual software updates. As a result of this connection the operating system, anti-virus and even word processing software is different from the versions the software running the firm was designed to work with. A failure to stay current with that software can result in a necessary function no longer working properly. A program installed and never updated since 2009 could not be expected to work correctly with other updated and current 2014 software.

Has the firm improved its marketing strategy to obtain new clients? If a review of the number of new clients obtained in 2013 reveals a number less than those obtained in 2012 the firm is losing ground. If no one at the firm is tracking this information the firm is in trouble. While the practice of certain areas of the law may have evolved slowly over the last 10 years, the operation of the law business has changed exponentially. If your firm is not attracting new clients through the use of social media, FaceBook, Twitter, a firm newsletter or current and relevant blog posts, your firm has little reason to expect 2014 will be any better than was 2013.

Is every firm employee playing from the same game book? [As the Super Bowl readies for kickoff here in New Jersey on Sunday a sports metaphor was necessary to close out this post.] If certain partners have their department staff work differently from the rest of the firm, fail to post time entries or approve invoices in a timely manner, or otherwise hold their department out as unique, the firm will find it more difficult to achieve it’s goals for 2014. The business of law, like every other kind of business, is a team effort. If every member of the business is not positively contributing toward the overall benefit of the firm, the future prospects of the firm will ultimately suffer.

If you cannot answer the title of this post, perhaps it is time to seek the answers from other team members in your firm or to seek the help of a law office productivity consultant.

Steve Miller, JD has provided law office productivity consulting services since 1998. He is certified in LexisNexis PCLaw®, LexisNexis Time Matters® and Amicus Attorney®.

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In August 2012 the American Bar Association House of Delegates approved several changes to the Model Ethics rules, including a modification to Comment 8 of the Competency Rule #1.1 (shown below bold face):

Maintaining Competence

[8] To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.

In my home state of New Jersey two years earlier, in January 2010, the New Jersey Supreme Court updated the rules for continuing legal education mandating that each of the 69,000 lawyers in the state, admitted to practice after 1960, must “complete 24 credit hours of continuing legal education every two years. Of those 24 credits, at least four must be in ethics and/or professionalism.”

Until this mandate by the NJ Supreme Court, the annual meetings of the New Jersey Bar Association and NJ Association for Justice (trial lawyers) were sparsely attended. Once the new CLE rules went into effect attendance tripled with lawyers taking 12 hours of CLE courses in 2 days. Clearly the mandatory CLE credit rule was motivation for the Garden State lawyers to stay current within their fields of practice.

However, competency in their “fields of practice” is a far cry from legal technology literacy. I speak from personal consulting experience where I have observed law firm partners recording appointments and check receipts on large paper ledger sheets, despite having up-to-date computer software on every computer in the office. When asked about this apparent technological disconnect, the response is always the same: “I don’t trust computers.”

The result is duplicated effort, as the office manager would then have to transcribe the partner’s notes into the relevant time and billing or practice management software the firm already owned. Similarly, I remain stunned at the number of younger lawyers who, to this day, hand-write their time entries on sheets of paper with rows and columns, which are then handed over to their secretary for entry into the firm’s billing system. Law firm productivity management would demand that these lawyers make their time entries directly into the firm’s billing system and leave their staff to perform more productive tasks. More than likely, the firm’s office manager/bookkeeper set the paper-entry procedure 25 years ago, so it was handed down to each succeeding generation of new associates.

Last year, during the George Zimmerman trial, an example of being technologically-challenged was displayed on the national stage when the prosecutor in the case demonstrated an almost zero understanding of how Twitter followers and Facebook friending works. The prosecutor’s attempt to connect a witness to a Zimmerman relative merely because the relative’s name appeared as a Twitter follower of the witness apparently fell flat. I’m certain that if the prosecutor had any children older than 10 years of age, they could have explained it to him in a way that even he could understand.

The risk today’s technologically-challenged lawyer faces is that a younger opponent in a case, who grew up with a laptop in junior high school and has an iPad on their desk today, will be able to mount a more vigorous case using their instinctual knowledge of legal-based software, social media and documents stored in the cloud. A loss due to such a lopsided match-up could quite easily devolve into a malpractice claim against the losing attorney for failing to meet the standards of competency set by the ABA for maintaining technical understanding. It is simply in the economic interest of every lawyer to embrace the use of technology to run their law office business more efficiently and to use technology to practice law more efficiently.

While I hope that happens, it is more likely that you and your staff will continue to follow the same procedures you used last year and the year before that. When was the last time you and your partners took a day to review each step performed by each employee from the front desk to the back room and analyzed how their tasks could be performed more efficiently?

Have you recently called into the office to see how long it takes for someone to answer an incoming call? How long were you kept on “Hold” after a curt “Law Office, one moment please?”

When was the last time someone reviewed all of the intermediate steps it required at your firm from initial telephone contact until obtaining a signed Retainer Agreement and initial payment receipt from a new client?

Has your firm adopted a policy to use an approved collection of Firm Documents so that your practice management or document assembly program auto-fills most of the text for those documents used repeatedly?

When was the last time you reviewed with the firm’s IT vendor the workstation lock-down policy so staff cannot use firm time for shopping for shoes or checking sports scores? Can the staff use firm internet band-width to stream their favorite online music station or video?

Besides the bookkeeper, who else is reviewing who is not promptly posting billable time entries? What is the firm policy for penalizing perpetual late posts?

Is the firm utilizing all of the features of the practice management program? When was the last time the staff had a refresher course to review all of the productivity functions the software provides?

Who is developing the firm’s “paperless” office policy? Has someone performed a review of what incoming and outgoing documents should not be on paper?

What is the firm’s short-term goal for moving to a “cloud-based” working environment? Who last checked to confirm that the firm’s back-up system is really making current backups? Is every single document created or received by the firm located on a central server accessible by all and with multiple redundant copies?

How mobile is the firm? Can each lawyer access their appointments, matter list and documents on their smartphone and tablet? How about creating time and expense entries in the field in real time?

If you or one of your partners are not addressing these issues today, then how do you expect your firm to work at maximum productivity and gain maximum profits in 2014?

Make today The Day: Snap Out of it!

Steve Miller, JD has provided law office productivity consulting services since 1998. He is certified in LexisNexis PCLaw®, LexisNexis Time Matters® and Amicus Attorney®.

We’d love your comments. Please click on the Headline of this post to access the Comment section.